Okay, let’s work through this step-by-step.

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### **Step 1 – Identify the industry**

Iberdrola S.A. is a major Spanish utility with regulated and unregulated power generation (renewables), networks, and retail supply operations.  
It fits best under **Regulated Utilities** and **Unregulated Power And Gas** methodologies.

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### **Step 2 – Adjusted EBITDA**

From the data:

- Reported **EBITDA** (Beneficio Bruto De Explotacion Ebitda) for 2022 = **€13,228m**

S&P adjustments:

1. **Leases**:  
   - Right-of-use assets = €2,370m  
   - Lease liabilities (current + noncurrent) = €151m + €2,287m = €2,438m  
   Lease depreciation = ~€2,370m (for simplicity, assuming it equals asset value)  
   Lease interest = we estimate from finance costs and lease liabilities.  
   We'll adjust EBITDA upward by lease depreciation (add back).

2. **Non-recurring items**:  
   Other gains/losses = €911m gain included in EBITDA. This could be partially nonrecurring if from asset sales. We'll exclude all of it as nonrecurring.

3. **Pensions**: No obvious defined benefit adjustment needed here; pension expense already in employee benefits.

4. **JV proportional EBITDA**:  
   Share of profit from equity method = €146m (after tax, so not EBITDA). This is immaterial to adjust proportionally without further detail.

So:

**Adjusted EBITDA** =  
13,228  
− 911 (nonrecurring gain)  
+ 2,370 (lease depreciation add-back)  
= **€14,687m**

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### **Step 3 – FFO**

FFO = Adjusted EBITDA − cash interest − cash taxes

**Cash interest**:  
Finance costs = €3,042m, but we need cash portion.  
From cash flow statement:

- Interest paid on debt = €1,495m  
- Interest paid on leases = €61m  
Total cash interest = **€1,556m**

**Cash taxes**:  
Income tax expense = €1,161m. From cash flow: taxes paid = **€1,055m**.

**FFO** =  
14,687 − 1,556 − 1,055 = **€12,076m**

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### **Step 4 – Adjusted Debt**

Adjusted Debt = reported debt + leases + pension deficit + hybrids + other − surplus cash

**Reported debt**:  
Noncurrent financial liabilities (debt) = €36,129m  
Current financial liabilities (debt) = €10,458m  
= **€46,587m**

**Leases**:  
Noncurrent lease liabilities = €2,287m  
Current lease liabilities = €151m  
= **€2,438m**

**Hybrids**:  
"Instrumentos de Capital con Caracteristicas de Pasivo Financiero" (noncurrent + current) =  
€576m + €87m = **€663m**  
S&P typically includes 50% of hybrids as debt = **€331.5m**

**Pension deficit**:  
Noncurrent provisions for employee benefits = €1,226m  
Current = €42m  
Total = €1,268m (we'll classify this as debt-like)

**Other debt-like items**: None significant from the data.

**Cash**: €4,608m (S&P may cap surplus cash; here all assumed eligible)

**Adjusted Debt** =  
46,587 + 2,438 + 331.5 + 1,268 − 4,608  
= **€46,016.5m**

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### **Step 5 – FFO / Adjusted Debt**

= 12,076 ÷ 46,016.5 ≈ **0.2624**

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<answer>0.2624</answer>